@article{Pannell:123715,
      recid = {123715},
      author = {Pannell, David J. and McFarlane, Donald J. and Ferdowsian,  Ruhi},
      title = {Rethinking the Externality Issue for Dryland Salinity in  Western Australia},
      address = {2000},
      number = {411-2016-25669},
      pages = {26},
      year = {2000},
      abstract = {Dryland salinity has been conceived of as a problem  involving massive off-site impacts and
therefore requiring  coordinated action to ensure that land managers reduce  those off-site
impacts. In economic terms, salinity is seen  as a problem of market failure due to
externalities,  including external costs from one farmer to another and  from the farm sector to
the non-farm sector. In this paper,  we argue that, at least in Western Australia  (WA),
externalities are much less important as a cause of  market failure than has been widely
believed. If all  externalities from salinity in WA were to be internalised,  the impact of this on
farm management would be small. There  are a number of factors contributing to this
conclusion,  both hydrological and socioeconomic. Together, they mean  that, relative to
common belief, the true physical severity  of externalities is diminished, and the  economic
significance of the remaining externalities is  further diminished. This does not mean,
however, that  salinity is amenable to resolution in a free market, as  there are other major
causes of market failure,  specifically public-good issues in research and  development, and a
range of problems related to farmer  adoption of salinity treatments. Existing policies are  not
adequately addressing these market failures. Current  misconceptions about the importance of
externalities from  salinity are themselves hindering progress in a number of  ways.},
      url = {http://ageconsearch.umn.edu/record/123715},
      doi = {https://doi.org/10.22004/ag.econ.123715},
}